Calm Counterattack: How China's Quiet Tariff Retaliation is Shifting Global Alliances

If China was upset about the U.S. imposing an additional 10% tariff on all Chinese goods, it managed to keep its anger well hidden.

Instead of displaying overt hostility, Beijing called on Washington to begin negotiations, warning that a trade war would leave no one victorious.

China maintained its composure until late in Washington’s night. As soon as the new tariffs took effect, Beijing struck back by announcing retaliatory tariffs of 10–15% on various U.S. imports—including coal, crude oil, and large automobiles—effective February 10. This calculated move appears to be part of President Xi Jinping’s strategy to turn the situation into a “win-win” scenario as U.S. pressure begins to ebb.

President Xi may also see a broader opportunity here. While Trump’s aggressive posture has been fracturing alliances at home—threatening even the European Union with tariffs during his very first month—other U.S. allies are left wondering what might be next. In contrast, China is eager to project an image of calm, stability, and a more attractive global trade partner.

“Trump's America-first policy is set to bring challenges and threats to nearly every country in the world,” says Yun Sun, director of the China Programme at the Stimson Centre.From a strategic standpoint, as U.S. leadership and credibility wane, China stands to benefit. Although this shift might not immediately improve bilateral relations, Beijing is likely to capitalize on the situation. As the leader of the world's second-largest economy, Xi has openly expressed his ambition for China to help shape an alternative global order.

Since the end of the COVID pandemic, Xi has been highly active on the international stage—traveling extensively and lending support to major institutions like the World Bank and global agreements such as the Paris Climate Accords. Chinese state media have portrayed these moves as efforts to engage countries worldwide and strengthen diplomatic ties.

Previously, when Trump cut U.S. funding to the WHO in 2020, China stepped in with additional financial support. There is now significant expectation that Beijing could once again fill the void left by American retrenchment—this time with foreign aid. On his first day back in office, Trump froze all U.S. foreign assistance, halting hundreds of USAID programs. Although some of these programs have since resumed, the ongoing disruption has left many questioning the future of U.S. aid. In this climate, China may attempt to bridge the gap, even amid its own economic challenges.

John Delury, a historian of modern China and professor at Yonsei University in Seoul, warns that Trump’s “America First” doctrine could further undermine Washington’s global leadership. “The combination of tariffs on major trade partners and freezing foreign assistance sends a message to both the Global South and OECD countries that the U.S. is no longer interested in international partnerships and collaboration,” he tells the BBC. As America withdraws from the world stage, President Xi's message of “win-win” globalization gains new significance.

In its bid for global governance, Beijing has long looked for an opening to challenge the American-led world order of the past 50 years—and the unpredictability of Trump’s presidency may well provide that opportunity.

New Alliances on the Horizon

“There’s growing momentum for a possible trilateral partnership among Australia, Japan, and South Korea, partly spurred by fears of a second Trump administration,” notes Mr. Chong. While many U.S. allies, especially in the Pacific, see reasons to engage with China, they remain cautious. This ambivalence has led countries like Japan, South Korea, the Philippines, and Australia to strengthen their ties with one another as a counterbalance to Beijing’s rising influence.

China may be holding its fire in hopes of negotiating a deal with Washington to prevent further tariffs and avoid a spiral of tensions between the world’s two largest economies. Notably, Trump granted reprieves to Canada and Mexico just hours before their tariffs took effect, and a call between Trump and Xi is expected this week.

The Broader Impact

The new U.S. tariff is bound to have a painful impact—it adds to the slew of tariffs imposed during Trump’s first term on tens of billions of dollars of Chinese imports. Meanwhile, many Chinese citizens are already anxious about their country’s sluggish economic performance. Although Beijing and Washington have clashed over tariffs before, the dynamics have shifted significantly since Trump's earlier term. China's trade relationships have diversified; it now holds robust trade agreements across Africa, South America, and Southeast Asia, becoming the largest trading partner for over 120 countries.

A potential deal may still be on the table, but experts like Chong Ja Ian from Carnegie China caution that the extra 10% tariff may not provide the leverage Trump seeks. Beyond trade, lingering concerns about China's assertiveness in the South China Sea and the growing tensions over Taiwan—regarded by Beijing as a breakaway province destined for reunification, even by force—further complicate the picture. Taiwan remains one of the most volatile issues in U.S.-China relations, with Beijing vehemently opposing any support from Washington.

It is also worth noting the juxtaposition: while U.S. officials have issued threats as outrageous as the annexation of Canada or the purchase of Greenland, countries in the region have historically leaned on their military alliances with Washington to balance China’s economic influence. Now, facing uncertainties from both Beijing and Washington, these nations might form new regional alliances independent of the two superpowers.

Calm Before the Storm

Trump announced the new tariffs over the weekend—just as Chinese families were celebrating the New Year, welcoming the God of Fortune into their homes. During this festive period, with bright red lanterns adorning nearly empty Beijing streets as many workers returned home for the holiday, China initially responded by declaring its intent to seek redress through the World Trade Organization. However, with the WTO's dispute settlement system essentially paralyzed since 2019, this legal recourse poses little threat to Washington.

Soon after, China unveiled its retaliatory tariffs. As the Chinese New Year festivities come to an end and officials return to Beijing, the stage is set for critical decisions. Recent signs of potential stability—such as what Trump described as “a great phone call” with President Xi—may soon be overshadowed by mounting bipartisan consensus in the U.S. that views China as the foremost economic and strategic threat.

Wu Xinbo, professor and director at the Centre for American Studies at Fudan University, warns, “Trump's unpredictability, impulsiveness, and recklessness are bound to cause significant disruptions in the bilateral relationship. His team includes several hardliners on China, and it's inevitable that the relationship will face serious shocks over the next four years.”

China remains deeply concerned about its fraught relationship with the U.S. and the possible damage a trade war could inflict on its slowing economy. At the same time, Beijing is actively looking for opportunities to sway the international community into its sphere of influence. In a rapidly shifting global landscape, the moves made today may well determine which nation shapes the international order of tomorrow.